Dr. Don Cilla reports

APPILI THERAPEUTICS ANNOUNCES SUBMISSION OF U.S. FEDERAL GOVERNMENT FUNDING PROPOSALS AND PROVIDES CORPORATE AND ADITXT TRANSACTION UPDATE

Appili Therapeutics Inc., along with its partners, have submitted applications for four new federal funding opportunities. The funding, if awarded, would total up to $117.5-million (U.S.) and support the company's efforts to advance urgent infectious disease treatments aligned with critical public health priorities.

Funding opportunities

By leveraging Appili's proven government contracting expertise, the company and its partner have applied for two solicitations announced by the National Institute of Allergy and Infectious Diseases (NIAID). The first proposal seeks $46.3-million (U.S.) in funding to develop a vaccine aimed at protecting against invasive fungal infections. The second proposal requests $36.4-million (U.S.) to develop an anti-fungal monoclonal antibody targeting a rare fungal infection. If awarded, the NIAID funds are expected to support development of both products through to investigational new drug (IND) applications and phase 1 clinical studies.

Appili also submitted two proposals to the U.S. Medical CBRN Defense Consortium (MCDC) seeking a total of $34.8-million (U.S.). The first proposal seeks $20.1-million (U.S.) to develop a potential broad-spectrum host-directed treatment for viral infections. This project, developed in collaboration with partners, aims to address the critical medical needs for war fighters at high risk of exposure to dangerous viral infections. The second proposal submitted to MCDC seeks $14.7-million (U.S.) to develop a broad-spectrum direct-acting anti-viral, potentially useful for treating patients infected with RNA viruses such as influenza, coronavirus, West Nile, Zika and other severely pathogenic viruses. If awarded, the funding is expected to support the advancement of both projects through manufacturing, non-clinical development and regulatory activities necessary to support an IND application.

Medical CBRN Defense Consortium membership

The company was recently selected to join the MCDC, further demonstrating Appili's commitment to U.S. preparedness and biodefence. With the consortium having awarded over $7-billion (U.S.) in project funding to date, Appili is solidifying its position as a key player in developing cutting-edge medical countermeasures.

Through the consortium, Appili plans to engage government stakeholders, collaborate with industry partners and pursue funding opportunities that align with the priorities of the U.S. Department of Defense.

$33.2-million (U.S.) received in non-dilutive funding awards to date

Appili has successfully raised approximately $33.2-million (U.S.) in prior government funding awards, showcasing its ability to develop compelling research proposals for groundbreaking technologies and form strategic partnerships to compete for government funding. The funds from prior awards helped advance development activities for pipeline programs, including ATI-1701, a vaccine candidate to eliminate a serious biological weapon threat, and Likmez (ATI-1501), an FDA-approved (U.S. Food and Drug Administration) ready-made suspension of metronidazole for the treatment of anti-microbial infections.

Update to USAFA awards

Appili has received an update to its arrangement with the U.S. Air Force Academy for ATI-1701, a biodefence vaccine candidate. Previously, ATI-1701 was awarded a total of approximately $14-million (U.S.) from USAFA, of which $11.6-million (U.S.) was allotted to pay for services under the agreement.

In the recent modification to the USAFA co-operative agreement, Appili received an increased general and administrative (G&A) overhead recovery rate. This rate was applied retroactively to the start of the co-operative agreement, resulting in an increase to the reimbursement for all past and future invoices. The increase in the allowable G&A overhead recovery rate is a significant benefit to Appili. While the total awarded amount is approximately $14-million (U.S.), due to continuing U.S. Defense Department budget constraints and other factors, the company does not anticipate additional funds to be allotted beyond the $11.6-million (U.S.) that has been funded to date for ATI-1701. Without additional funding, Appili does not expect to be in a position to submit an investigational new drug application for ATI-1701 to the FDA by the end of this year, as originally expected.

Appili has received $9.7-million (U.S.) in USAFA reimbursements to date, covering labour expenses, subcontractor and vendor costs, as well as other direct and indirect costs for budgeted program activities. The company remains committed to advancing ATI-1701 and will continue to invoice USAFA for program expenses, utilizing the existing funding.

Update on going-private transaction with Aditxt Inc.

The company also wishes to provide an update on its proposed going-private transaction, pursuant to which Aditxt, through its wholly owned subsidiary, Adivir Inc., will acquire all of the issued and outstanding Class A common shares of the company by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario).

As previously announced, shareholders of the company overwhelmingly voted in favour of a special resolution approving the transaction. The company has also secured all necessary court approvals to effect the transaction.

Among other customary closing conditions, the transaction remains subject to Aditxt securing sufficient financing to complete the transaction. In this regard, on Feb. 28, 2025, Appili granted a waiver to Aditxt to extend the outside for the transaction to March 31, 2025, in exchange for a payment by Aditxt of $250,000 (U.S.). The parties have also agreed that, if a termination fee becomes payable to the company by Aditxt or Adivir at any time, the Waiver payment would be credited toward any such termination payment.

Subject to satisfaction or waiver of the remaining closing conditions, Appili expects the transaction to close in the first quarter of calendar 2025.

For further details regarding the transaction, please see Appili's press release dated April 2, 2024, and Appili's management information circular dated Oct. 4, 2024, a copy of which is available under Appili's profile on SEDAR+.

About Appili Therapeutics Inc.

Appili Therapeutics is an infectious-disease biopharmaceutical company that is purposefully built, portfolio driven and people focused to fulfill its mission of solving life-threatening infections. By systematically identifying urgent infections with unmet needs, Appili's goal is to strategically develop a pipeline of novel therapies to prevent deaths and improve lives. The company is currently advancing a diverse range of anti-infectives, including an FDA-approved ready-made suspension of metronidazole for the treatment of anti-microbial infections, a vaccine candidate to eliminate a serious biological weapon threat and a topical anti-parasitic for the treatment of a disfiguring disease. Led by a proven management team, Appili is at the epicentre of the global fight against infection.

We seek Safe Harbor.